PERA and Colorado did not ask for our cooperation in this fiscal crisis they chose to violate a contract. The meetings held throughout the state by PERA preceding SB 10-001 did not seriously address any remedy save the PERA favored 2-2-2 response. 2-2-2 has been shown to impose a disproportionate burden upon annuitant.

Perhaps had the annuitants been contacted as a group and requested to forgo our annual increase, or accept a diminished annual increase, for a defined, finite, period of time the outcome(s) may have been different. Annuitants are not ignorant of, nor insensitive to, the financial issues facing PERA, we simply do not desire to forever lose benefits we earned during our long service to the citizens of Colorado.

There were no secrets meetings nor conspiracies present when our elected representatives publicly debated and the passed into law the annual increase. The fact that the current economic situation makes the annual increase appear as largess is a temporary and short lived phenomena. The predicted inflation that is a current topic of discussion will find the 3.5% annual increase wanting in meeting the annuitant’s needs. I would also note that when our non-PERA friends and associates were experiencing annual growth far in excess of 3.5% there was no movement to share the prosperity with us.

As pointed out in other responses present in the site, the 2008 economic downturn was not a major event in the stability of PERA. PERA was in long decline when that crisis occurred. The decline of PERA was caused by mismanagement in providing early retirements, matching 401K contributions, fire sale rates for purchased service credit and the failure of Colorado to fully fund their contribution. Colorado and the legislature created their own exigencies and now want to violate Constitutional contract law to correct their mistakes.
Our attorneys seem to be saying that we do not dispute that at some point the state may cancel or invalidate the annual increase as a fiscal necessity/emergency. Our attorneys contend that this worst case, albeit unconstitutional, response/scenario cannot be the initial answer to this or any crisis.

One aspect of the scope of options available to PERA and Colorado has now been placed into public view in the form of the increased burden being placed upon Colorado employees. Colorado levied an additional 2.5% (of the Colorado government portion) PERA contribution on state employees for fiscal year 2010-2011 and there is a bill pending in the legislature to extend this levy for fiscal year 2011-2012. Governor Hickenlooper now proposes an additional 2.0% levy, for a total burden of 4.5%, in the 2011-2012 budget. There has been no proposal, nor to my knowledge any discussion, of the state paying back the contributions forced upon the employees and there exists a reasonable expectation that some form of this increased burden may continue to bring relief to the state budget for the long term.

Why is it that when the state needs immediate relief a viable response instantaneously appears? This type of response, with Colorado assuming their proper PERA contribution, would have provided immediate and long term stability to the health of PERA.

Obviously the State of Colorado continues avoid their responsibility in funding PERA and their accountability in the fiscal standing of PERA. This manufactured impending crisis will continue until the state meets their obligations/promises to their mandated retirement program.

This may also be the time to ask questions about the movement to allow states to declare some form of bankruptcy in response to the debt crisis. The state of Colorado, in accordance with its own Constitution, must have a balanced budget. PERA, by their own statements, does not face liquidity issues until at least the next decade. I am not in favor of ignoring the issues, I only request that we address the solution equally. It seems that there current dilemma is largely funding issue not a spending issue.

In discussing PERA with others I am often informed that times and finances change and it is only reasonable that we (annuitants) accept the negative consequences of the current downturn. I submit to you that this crisis will pass, PERA health will return and the private sector will again surpass Colorado employees in wages and benefits. This issue is one of integrity. The State and citizens of Colorado imposed a retirement system on its employees and benefited from the years of service provided by those same employees. To turn your/our backs on those obligations is unconscionable.

If one were to impose the same response to other current or near current events we would have agreed to increase interest on existing mortgages when the housing industry was in peril. We would return and pay full MSRP on GM and Chrysler vehicles as they really were not wise to let them go at less than cost. We would bail out the banks for their unwise fiscal decision.. Oh wait, we did that didn’t we?